Influence of Sustainable Quality Management on Organizational Performance

The purpose of this research is to present and test a conceptual framework to aid in understanding and explaining the relationship between sustainability practices and organisational performance. The relevant theoretical insights are presented first, followed by a discussion of the relationship between quality management and sustainability. An extensive literature review is conducted on key intersections of quality management and sustainability. The research further investigates the dimensions of sustainability practices through the review. It develops a reliable and valid instrument for the sustainability practice constructs, which could be beneficial for both practitioners and academicians. Based on the notion of exploitation and exploration concepts, the research delineates sustainability practices and proposes causal relationships between sustainability practices and organisational performance. Furthermore, the conceptual framework is further discussed in terms of different outcomes related to sustainability performance, quality performance and business performance. One of the primary propositions of this framework is that the alternative relationships between sustainability practices (exploitation and exploration) and organisational performance depend on different factors, including environmental uncertainty, competitiveness, long-term orientation and institutional approaches. Therefore, the research is an attempt to cover the relatively less empirically explored area of the dynamics of corporate sustainability and organisational performance. The empirical data for this study was drawn from a large-scale international survey based on the following countries: Slovenia, Spain, Serbia, Poland, and Germany. A total of 247 organisations participated in the survey. The outcome of regression analyses provides the evidence that sustainability practices positively and significantly influence organisational performance. Regarding the antecedents of sustainability practices, our findings suggest that the main enablers for the successful adoption of sustainable practices are the support of top management, the integration of sustainability into vision and strategy, and the establishment of a sustainability centred culture. Furthermore, empirical evidence from this research also confirmed the existence of ambidextrous orientation, suggesting that organisations that are able to simultaneously pursue exploratory and exploitative sustainability practices can also expect performance benefits. However, the results indicate that when organisations maintain relatively high levels of exploratory and exploitative practices, significant relationship between sustainability practices and organisational performance seems to disappear. The results of the MANOVA analysis indicate that there are significant mean differences in organisational performance measures for low and high levels of sustainability practices. Therefore, by focusing on exploration and exploitation practices, organisations can expect to achieve higher performance outputs and outcomes. In addition to the direct influence of sustainability practices on the organisational performance, results also revealed that the innovation performance serves as a mediator in the relationship between sustainability practices and financial and market performance. This suggests that greater engagement in sustainability exploration and sustainability exploitation leads to greater innovation performance, which in turn leads to greater financial and market performance. The results also support the contingency and institutional view with regard to the relationship between sustainability practices and performance rather than relying upon a ‘universal’ view of sustainability practices. For example, the results show that in moderate environmental contexts (moderate competitiveness and uncertainty) sustainability exploitation practices seem to be a predominant predictor of organisational performance. However, it appears that when the level of competitiveness increases, sustainabi